Correlation Between TOWNSQUARE MEDIA and PT Bank
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and PT Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining TOWNSQUARE MEDIA and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOWNSQUARE MEDIA INC and PT Bank Rakyat, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and PT Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in TOWNSQUARE MEDIA with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and PT Bank.
Diversification Opportunities for TOWNSQUARE MEDIA and PT Bank
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TOWNSQUARE and BYRA is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat and TOWNSQUARE MEDIA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on TOWNSQUARE MEDIA INC are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and PT Bank go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and PT Bank
Assuming the 90 days trading horizon TOWNSQUARE MEDIA is expected to generate 1.25 times less return on investment than PT Bank. But when comparing it to its historical volatility, TOWNSQUARE MEDIA INC is 2.24 times less risky than PT Bank. It trades about 0.04 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 27.00 in PT Bank Rakyat on October 14, 2024 and sell it today you would lose (3.00) from holding PT Bank Rakyat or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. PT Bank Rakyat
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| PT Bank Rakyat |
TOWNSQUARE MEDIA and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and PT Bank
The main advantage of trading using opposite TOWNSQUARE MEDIA and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, PT Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PT Bank will offset losses from the drop in PT Bank's long position.| TOWNSQUARE MEDIA vs. Boyd Gaming | TOWNSQUARE MEDIA vs. CONTAGIOUS GAMING INC | TOWNSQUARE MEDIA vs. DETALION GAMES SA | TOWNSQUARE MEDIA vs. Hochschild Mining plc |
| PT Bank vs. EEDUCATION ALBERT AB | PT Bank vs. TOWNSQUARE MEDIA INC | PT Bank vs. Adtalem Global Education | PT Bank vs. Tencent Music Entertainment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |